issue #18, week 37. 13 September 2007
Prepared by TDM and Aloysius Gng (CEPMLP/Dundee)

TDM News Digest

provides a condensed overview of recent events of interest to the international arbitration community.

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Recent issues:

NEWS

Venezuela: Exxon seeks deal on Venezuela oil

September 13, http://news.bbc.co.uk/1/hi/business/6992487.stm

Exxon Mobil is seeking arbitration over a stand-off with Venezuela about the takeover of its oil assets. The US oil firm made its case to the International Centre for Settlement of Investment Disputes, a group with close ties to the World Bank.

It has not said how much compensation it wants for the 41.7% stake in the Orinoco Belt oil field - worth an estimated $750m (£370m). Venezuela took over the oil project as part of a nationalisation drive.

…

Dubai: Emaar says $1.2bn Saudi suit will be settled in its favour

September 13, http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=172405&version=1&template_id=48&parent_id=28

Dubai's Emaar Properties, the Mideast's largest real estate developer, said yesterday it isn't in breach of a contract with Saudi's Jadawel International as it faces a $1.2bn lawsuit in the kingdom that could slash the company's earnings by half.

"Emaar is of the firm opinion that it has not breached any agreement or law in relation to this deal, which was aborted as a result of the conditions not being met," an Emaar spokesperson said in a faxed statement. An Emaar spokesperson on Tuesday confirmed that the real estate developer is facing a 4.5bn Saudi riyal ($1.2bn) lawsuit in Saudi Arabia.

The Asharq Al Awsat newspaper reported on Tuesday that Emaar Saudi, a joint venture between Emaar Properties and Jadawel International, had filed a legal claim to the International Chamber of Commerce against the UAE-based firm for not fulfilling terms agreed on certain projects. The dispute was referred to arbitration in 2005 following a ruling by the Board of Grievances in Saudi Arabia that it has no jurisdiction to look into the issue, Emaar said.

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Fraport execs face charges—stockholder

September 12, http://www.manilatimes.net/national/2007/sept/12/yehey/metro/20070912met1.html

Fraport AG officials face charges as a result of the recent World Bank (WB) arbitral court ruling dismissing its $425-million investment claim against the Philippine government, according to George Wengert, holder of considerable Fraport shares and a tax consultant who runs an auditing firm in Germany.

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United States: Arbitration Loser Can't Relitigate Claim of "Fraudulent" Award, Second Circuit Holds

via Barry Barnett, http://blawgletter.typepad.com/

A party, Pertamina, loses an arbitration in Switzerland. It reacts by getting an Indonesian court to annul the award, but the Supreme Court of Indonesia reverses the annulment order. The winning party, Karaha Bodas Company, successfully moves in a Texas federal court to confirm the award. The Fifth Circuit upholds the confirmation. KBC registers the federal judgments in New York federal court. Pertamina files a new lawsuit in the Cayman Islands. It alleges that the winning party procured the arbitration award by "fraud". The New York court enjoins Pertamina from proceeding with the Cayman Islands case. Karaha Bodas Co., L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, No. 07-0065 (2d Cir. Sept. 7, 2007).

Today, the Second Circuit affirmed. It held that KBC satisfied the requirements for an anti-foreign-suit injunction under China Trade & Development Corp. v. M.V. Choong Yong, 837 F.2d 33 (2d Cir. 1987). The court rejected Pertamina's argument that its Caymans Islands case "is a proceeding 'separate and independent of the arbitration proceedings and award.'" Slip op. at 17. It concluded instead that Pertamina had, in losing its attempt to vacate the award in Texas, actually litigated its claim that Karaha Bodas procured the award by fraud:

"Although Pertamina makes new factual allegations in support of its claim that the Award should not have been enforced against it, these new factual allegations are not sufficient to undermine the preclusive effect of several earlier federal court decisions that (1) the Award should be enforced and (2) KBC is entitled to Pertamina's New York funds in an amount sufficient to satisfy the Award."

Karaha Bodas Co., L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, No. 07-0065 (2d Cir. Sept. 7, 2007). [pdf]

Congo: Africo's C$210m Kalukundi in legal snare

September 06, http://www.miningmx.com/mining_fin/529921.htm

AFRICO, the Toronto-listed copper exploration firm, described events barring it from developing its C$210m Kalukundi mine in the Congo as "an attempted theft" and said it was considering taking the matter to the Washington-based International Court of Arbitration.

Africo discovered in April that plans to develop Kalukundi, estimated to produce 16,400 tonnes/year of copper, were interrupted after Akam Mining had seized ownership of the prospect, a development supported by a Lubumbashi court. Africo said it had not been provided with notice of the sale to Akam which had been through the $600,000 acquisition of Swanmine which controls Kalukundi. The sale in execution followed a judgement against Africo it pay former employee Alejandro Beradone $3m for non-renewal of his employment contract.

Africo had already been appealing that judgement claiming Beradone had agreed separation from the company. His departure from the company is captured in a termination of employment contract dated July 19, 2005. said Africo. Beradone had received a settlement in terms of that agreement, Africo said.

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Algeria's Sonatrach rescinds gas project with Spanish firms

September 03, http://www.eubusiness.com/news_live/1188852421.98

Algerian state-owned energy company Sonatrach is rescinding a natural gas contract with Spanish firms Gas Natural and Repsol YPF, according to a statement by Spanish market regulator CNMV. The Spanish firms said they "regret and reject the Algerian decision to appropriate for themselves, and illegitimately" the project at Algeria's Gassi Touil plant.

In a statement to the regulator they blamed the move on political influence wielded by Algiers over Sonatrach and said they would take the issue to international arbitration where they would seek damages.

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South Africa: Arbitration under the palm trees

September 5, http://www.cbn.co.za/dailynews/2365.html

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The Arbitration Foundation of South Africa (AFSA) together with the Chamber of Commerce of Mauritius and the South African Institute of Directors, has decided to create a regional dispute resolution forum for the determination of private cross border disputes rising within the SADC region. In essence, the new forum will seek to determine cross border disputes in an expeditious and cost effective manner, applying international best practice in dispute resolution. The "cross border" nature of the dispute can be as limited as the foreign domicile of one of the parties to the particular contract in question.

…

What AFSA proposes is an arbitration forum under the auspices of the Model Law, but with a procedure adopting the best provisions from a variety of regimes - the Uncitral Rules, the Rules of the London Court of International Arbitration, the Arbitral Rules of the International Chamber of Commerce, etc. The singular advantage of dispute resolution in such a forum is that it should be cheaper and quicker than the ordinary court process. As presently minded, the procedural rules would envisage a process of six months in which the dispute must be finally determined. Certain rules require prior full disclosure of all evidence, which would eliminate any "trial by ambush" and facilitate old analysis of the merits of respective positions at an early stage - something which will encourage extra-curial settlement. It is a form of open procedure that South African parties will need to get used to....

Russia: Khodorkovsky to view Chevron Data

September 4, http://www.themoscowtimes.com/stories/2007/09/04/048.html

Mikhail Khodorkovsky won a U.S. court ruling for access to Chevron research on Yukos as he prepares to defend himself against new charges in Russia. A U.S. district court judge in northern California on Friday accepted that Chevron may have "valuable evidence" that could help Khodorkovsky refute charges of embezzlement and money laundering, lawyers for Khodorkovsky said on their client's web site.

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Russian Court Issues Arrest Warrant for Oil Tycoon

August 28, http://www.washingtonpost.com/wp-dyn/content/article/2007/08/28/AR2007082801535.html

A Moscow court said Tuesday that it has issued an arrest warrant for Mikhail Gutseriyev, owner of Russneft, a major Russian oil company. He appeared to have become the latest Russian tycoon to flee the country after running afoul of the authorities. Gutseriyev is believed to be abroad and has been put on an international search list, according to an Interior Ministry spokeswoman who declined to give her name. Russian news agencies later quoted the ministry as saying that Gutseriyev's arrest had been ordered on grounds he broke court-imposed travel restrictions.

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Swiss Court: Yukos Case is 'Political'

August 25, http://www.washingtonpost.com/wp-dyn/content/article/2007/08/24/AR2007082402011.html

Switzerland's supreme court has issued an unusual, high-profile rebuke to the Kremlin, ruling that Russia's continuing investigation of the Yukos oil company is politically motivated. The court ordered Swiss authorities not to turn over bank documents that Russia is seeking in connection with the case.

The decision, disclosed on Thursday, said that Russian authorities' pursuit of what was once Russia's largest oil company had a "political and discriminatory character . . . underlined by the infringement of human rights and of the right to defense."

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China: Danone v. Wahaha

http://www.chinaeconomicreview.com/cer/2007_09/Danone_v_Wahaha.html

Steven M. Dickinson on the lessons to be learned from the tensions within China's largest beverage joint venture: Danone Group and its partner, Wahaha Group Company, are shareholders in a joint venture (JV) company that is the largest beverage company in China. A recent dispute between the partners now threatens to wreck it. Disputes such as this are not inevitable in China. They can be avoided by following certain basic rules. Many of the most important rules were violated in this case. As a result, the problems that have arisen were almost certain to occur.

The Facts

As the result of the breakdown in negotiations, both parties resorted to arbitration and litigation. The proceedings to date are as follows:

Lessons to be learned

EVENTS

OGEMID reception, Columbia University - New York: October 31, 17.15

As part of Columbia University Law School's investment treaty conference and following a suggestion by Prof Jose Alvarez, of Columbia Law School and President of the American Society of International Law, Prof. Waelde would like to invite OGEMID members to get to know each other personally at a reception. We hope that there will be enough "electronic voices" converted into "real people".

Location: Columbia University, New York, Lerner Hall, Room 555.

About the conference http://www.cpii.columbia.edu/events/

Introduction to International Commercial Arbitration - 3 October, Vilnius (Lithuania)

Review of basic legal principles and debate, ONE DAY TRAINING SEMINAR on WEDNESDAY 3 OCTOBER 2007 at the Old Campus of the University of VILNIUS (Lithuania)

Organised by the YOUNG INTERNATIONAL ARBITRATION GROUP (YIAG) OF THE LONDON COURT OF INTERNATIONAL ARBITRATION (LCIA) in association with the Law Faculty of the University of Vilnius and the LCIA for practitioners (in-house and in private practice) below the age of 45

The seminar will be held in English and is free of charge. Places allocated on a first come first served basis

For further information please contact

ICC: Paris to host next Joint Colloquium - 16 November

http://www.iccwbo.org/iccbgbge/index.html

This year's ICC/AAA/ICSID Joint Colloquium will be hosted by the ICC International Court of Arbitration in Paris on 16 November. Distinguished arbitrators will join the leaders of the three institutions to examine issues of current interest including efficiency in arbitral proceedings, State-party arbitration and extending proceedings beyond the original parties. Click here for more information.

Short overview of upcoming events

The above information is reproduced from the International Arbitration Planner by kind permission of Lovells (www.lovells.com and www.lovells.com/arbitration). More details on these and many other events can be found at www.arbitrationevents.com

MOVES / JOBS

Winston & Strawn Expands Its International Arbitration Practice in D.C. with the Addition of Former State Department Adviser Mark Clodfelter

September 11, http://www.winston.com/index.cfm?contentid=30&itemid=957

Winston & Strawn LLP announced today that prominent international arbitration attorney Mark Clodfelter has joined the firm's Washington, D.C. office as of counsel. Clodfelter will focus his practice on international arbitration, including investor-State arbitration.

Clodfelter is returning to private practice after serving for the past seven years as the U.S. State Department's assistant legal adviser for international claims and investment disputes. In this position, he directed the representation of the United States (U.S.) in international arbitration proceedings, including ICSID-AF and UNCITRAL proceedings under the investment chapter of NAFTA, in which he led his office's unblemished record of success. He also led the representation of the U.S. before the Iran-U.S. Claims Tribunal, the U.N. Compensation Commission and in a major dispute before the Permanent Court of Arbitration under a bilateral investment incentive agreement.

"I am pleased to welcome Mark to the firm, " said Tom Mills, managing partner of Winston's D.C. office. "Winston is recognized as having one of the world's top international arbitration practices, and Mark's addition to the team will tremendously expand our capabilities."

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Crowell & Moring's London Office Expands International Dispute Resolution Group with Counsel Sarita Woolhouse

http://www.crowell.com/NewsEvents/PressRelease.aspx?id=177

Crowell & Moring LLP is pleased to announce the addition of counsel Sarita Patil Woolhouse to the firm's highly regarded International Dispute Resolution Practice, adding to its substantial experience in international investment and treaty arbitration, as well as its far-ranging work in international commercial arbitration. Woolhouse will be resident in the firm's London office.

As a lawyer trained and qualified in both India and England & Wales, Woolhouse brings to Crowell nearly 20 years of experience in resolving international disputes, especially in the areas of energy, information technology, telecommunications, financial services, and construction. Woolhouse's practice will focus on South Asia, particularly India, Pakistan, Bangladesh, and Sri Lanka, as well as the Arabian Gulf. She will work with group co-Chair Arif Hyder Ali, and other members of Crowell & Moring's South Asia team, including associates Baiju Simal Vasani and Sobia Haque, and C & M International Director Amarnath Bhat. Woolhouse will also work closely with London-based Jane Wessel, whose commercial arbitration work includes representing numerous Fortune 500 clients in the UK and abroad.

Baker & McKenzie Strengthens Dispute Resolution Practice in Japan with Haig Oghigian & Hideyuki Kobayashi

September 03, http://www.bakernet.com/BakerNet/News/Press+Releases/JapanDisputeResolution.htm

Haig Oghigian joined the Firm as a Partner on September 1, 2007. He joins from the Tokyo office of Paul, Hastings, Janofsky & Walker LLP.

Mr. Oghigian is a dispute resolution professional with many years experience representing Japanese and international clients in the fields of international commercial arbitration, particularly with cross-border mergers and acquisitions, joint ventures and licensing and distribution agreements. He is ranked in Asia for Dispute Resolution by Chambers & Partners Global Guide 2007, in Japan for Dispute Resolution by Asia-Pacific Legal 500 (2007), and for Commercial Arbitration by Euromoney Expert Guides.

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Hideyuki Kobayashi also joined the Firm as a Partner on July 1 from Anderson Mori & Tomotsune.

Mr Kobayashi has extensive experience acting for clients in relation to international litigation, arbitration and product liability and has served as a professor at several major universities in Japan. He currently lectures at Hitotsubashi University's Graduate School of International Corporate Strategy.

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Professor Joost Pauwelyn joins King & Spalding's International Trade Practice

September 11, http://www.kslaw.com/portal/server.pt?space=KSPublicRedirect&control=KSPublicRedirect&PressReleaseId=2747

King & Spalding, a leading international law firm, announced today that Professor Joost Pauwelyn has joined its international trade practice as senior advisor. Pauwelyn is a world-renowned expert on international economic law, particularly the law of the World Trade Organization (WTO) and international investment law.

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White & Case Names Two New Counsel in Paris

September 6, http://www.whitecase.com/News/Detail.aspx?news=1780

White & Case has announced the promotion of two lawyers, Juliette Goyer and Christophe von Krause, to counsel, reflecting the continuing development of its presence in the areas of competition law and international arbitration.

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Jennifer L. Price joins King & Spalding Arbitration Practice

September 06, http://www.kslaw.com/portal/server.pt?space=KSPublicRedirect&control=KSPublicRedirect&Pre ssReleaseId=2744

King & Spalding announced that Jennifer L. Price, a noted litigator with more than 20 years' experience, has joined the firm as partner in the international arbitration practice. Price will practice from the firm's 100-lawyer Houston office, focusing primarily on domestic and international disputes for energy and petrochemical companies.

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